Your Health.
Take Charge.
HRA… Healthcare FSA…What’s the
difference and how can they work together
to benefit you?
A key component and benefit of Sandia Total Health is the Health Reimbursement Account (HRA),
which you can use to pay your deductible and your share of eligible medical and prescription drug
expenses.
The HRA shares some similarities with the Healthcare Flexible Spending Account (FSA) that
Sandia already offers. It’s important to understand these similarities, and the differences, because
you can use both the HRA and the Healthcare FSA to help pay your health expenses.
We’ve provided the following information to help you understand the differences between the two
accounts. The examples on pages 3 and 4 illustrate how they might work together to benefit you.
HRA
Healthcare FSA
Eligibility and
Enrollment To participate, you must enroll in Sandia Total Health and complete your biometric screening and the Health Assessment by the deadline. Outside of enrolling in Sandia Total Health, there isn’t a separate enrollment process for the HRA.
You may enroll in an FSA regardless of which healthcare plan you choose. You must enroll during Open Enrollment. However, you may be eligible to enroll during the year, based on an eligible life event.
Funding You earn your portion of Sandia’s annual HRA contribution ($250) by meeting the criteria listed above. The portion of the contribution for your dependents does not require any action. The amount Sandia contributes is based on the coverage tier you elect and is not considered taxable income:
• $250 for Employee-Only
• $500 for Employee + Spouse or Child(ren) • $750 for Employee + Spouse and Child(ren) If you do not complete your health screening and the Health Assessment, Sandia will contribute $250 less to your HRA than if you complete your biometric screening and the Health Assessment.
You fund your FSA each paycheck with pre-tax dollars. That means no federal, state, Social Security, or Medicare taxes are withheld. You can set aside a minimum of $100 and a maximum of $5,000 per year. It’s important to carefully estimate your contribution amount, since you’ll lose any funds you don’t spend by the end of the plan year.
Eligible Expenses You can use the money in your HRA to pay your share of eligible medical and prescription drug expenses, such as the deductible and coinsurance.
You can use the money in your FSA to pay for eligible healthcare expenses, such as medical, dental, vision, prescription drug, and over-the-counter medication expenses.
Claims
Reimbursement* Medical claims will be filed automatically as follows: • First, your healthcare provider will file a medical
claim for any medical services you receive through the UHC network.
• Second, if the service requires that you pay the deductible or coinsurance, UHC will look to see if you have funds in your HRA. If you do, UHC will pull your share of the cost of the service from your HRA and pay the provider directly.
• Third, if there’s a balance due, FSA funds will be used, up to available funds, if you set up an account. (See FSA Claims Reimbursement) • Fourth, you’ll receive a monthly health statement
explaining how much to pay the provider. You’ll also receive a debit card to use for providers who demand payment at the time of service, or for eligible prescription drug expenses at the pharmacy.**
Eligible FSA claims will be filed as follows: • First, medical claims that are submitted
automatically may pull funds from your FSA and pay the provider directly, after the HRA funds are exhausted.
• Second, you’ll receive a debit card to use for eligible expenses.**
• Third, you may submit a claim manually; just log on to www.myuhc.com to find the manual-reimbursement claim forms and instructions.
Unused Account
Balances Balances left in your HRA at the end of the year will roll over to your HRA for the next year (up to a maximum of 5 times Sandia’s annual contribution amount).
All claims and supporting documentation must be filed by April 15 of the following calendar year. Money left in the account does not roll over to the next plan year; you will lose this money.
HRA
vs.
Healthcare FSA
:
Key Differences
These are the key differences between the HRA and the Healthcare FSA.
* All Sandia Total Health enrollees will be provided a new user packet with instructions on using the accounts, eligible expenses, direct deposit setup, and claim filing. Claims processed automatically will be paid to the provider directly unless you have turned off the automatic feature or have already paid the provider. If you have already paid the provider, you’ll receive the reimbursement by check or direct deposit as selected. Members can deactivate the automated claim process, set up direct deposit, obtain claim filing forms, and view their account by logging on to www.myuhc.com. ** Not all pharmacies can accept debit cards. For a listing of participating pharmacies, go to the Take Charge website at http://hbe.sandia.govand
How the HRA and Healthcare FSA Work Together to
Save You Money
Example: Bob (Employee-Only coverage)
Bob is a single employee who contributes $900 to a Healthcare FSA each year. Bob enrolls in Sandia
Total Health for 2010 (employee-only coverage) and completes the biometric screening and Health
Assessment by December 31, 2009. Sandia contributes $250 to Bob’s HRA. Bob has the following medical
expenses during 2010:
Actual Cost of Service Bob’s Out-of-Pocket Cost
Covered
Services Non-Covered Services
Covered
Services Non-Covered Services
Annual Physical $ 210 $ 0
Primary Care Physician Office Visits (6 visits) $ 480 $ 480
Specialist Office Visit (1 visit) $ 250 $ 250
Preferred Brand Drug Prescription (6 retail fills) $ 360 $ 108
Generic Drug Prescription (12 retail fills) $ 420 $ 84
Various OTC* Drugs/Supplies $ 240* $ 240*
Cost for Services $1,720 $ 240 $ 922 $ 240
Total Cost $1,960
($1,720 + $240)
$1,162 ($922 + $240) * Over-the-counter drugs and medical supplies are not covered by any of Sandia’s healthcare plans.
Here’s how the HRA and Healthcare FSA would work together to benefit Bob:
First: Bob’s total out-of-pocket costs for covered services will be reduced first by Sandia’s
HRA contribution.
Total out-of-pocket costs for covered services
$ 922
- HRA contribution
- $ 250
= Remaining out-of-pocket costs for covered services $ 672
Then: The remaining expenses, including his eligible over-the-counter drugs and medical supplies, can
be reimbursed through his Healthcare FSA.
Remaining out-of-pocket costs for covered services
$ 672
+ OTC drug/supplies
+ $ 240
- FSA contributions
- $ 900
= Total remaining out-of-pocket costs
$ 12
Example: Jill (Employee + Spouse and Child(ren) coverage)
Jill is an employee who covers her spouse and children, and contributes $3,000 to a Healthcare FSA
each year. Jill enrolls in Sandia Total Health for 2010 (employee + spouse and child(ren) coverage) and
completes the biometric screening and Health Assessment by December 31, 2009. Sandia contributes
$750 to Jill’s HRA. Jill and her family have the following medical expenses during 2010:
Actual Cost of Service Jill’s Out-of-Pocket Cost
Covered
Services Non-Covered Services Covered Services Non-Covered Services
Annual Physical $ 210 $ 0
Spouse Physical $ 210 $ 0
Primary Care Physician Office Visits (10 visits) $ 800 $ 800
Specialist Office Visit (3 visits) $ 750 $ 750
Preferred Brand Drug Prescription
(12 retail fills) $ 720 $ 216
Generic Drug Prescription (24 retail fills) $ 840 $ 168
Various OTC* Drugs/Supplies $ 600* $ 600*
Lasik Surgery* $1,500* $1,500*
Cost for Services $3,530 $2,100 $1,934 $2,100
Total Cost $5,630
($3,530 + $2,100)
$4,034 ($1,934 + $2,100) * Over-the-counter drugs and medical supplies are not covered by any of Sandia’s healthcare plans.
